New Brunswick Development Corporation commonly known as DEVCO was created in the mid-1970s to carry out redevelopment projects. Since inception, the company has seen more than 1.6 billion dollars in investment to aid in Brunswick’s economic revitalization. The new Brunswick is a model for the Atlantic City Development that is hoped to save Atlantic City from the debts incurred.
The unpaid CRDA loan raises questions about New Brunswick Devco on whether it can stand and surpass the debt level that has caught up with it to reach a point of paying for the loans they took. The 235 room Heldrich that opened in 2007 has struggled to attract guests having an occupancy rate of 63%. The hotel was, so cash strapped that the corporation had to tap 776,000 dollars of its money to fund capital expenses. According to Chris Paladino who heads the company the CRDA would be paid though it would take more years before that materializes.
According to the article that was written on Press Atlantic City, the 20 million was part of a 107 million in financing brought together to build the Heldrich. Those bonds were to be paid with revenue from the hotel though it has been unable to raise the funds. While the New Brunswick arranged to finance for the Heldrich the Middlesex County Improvement Authority was formally, the borrower of the 20 million.
The CRDA director John Palmieri is confident that the loan will be paid and even stated that they gave the loan knowing that they will be among the last to paid thus the issues should not be an alarm as they make risky decisions every day regarding loan and that is part of their job.